Cordillera facing cash crunch, owner says
August 5, 2010
EDWARDS, Colorado – One year after acquiring the Club at Cordillera, the family that bought it is telling members it’s facing a $6 million shortfall through the end of the year.
David Wilhelm and the Wilhelm Family Partnership is asking members for loans, according to a letter from David Wilhelm to Club at Cordillera members. In June 2009, the Wilhelms acquired Cordillera’s four golf courses, clubhouses and other facilities.
The purchase price has never been disclosed, and does not appear in Eagle County’s records.
Wilhelm faced angry members in two meetings this week, Tuesday and Wednesday. There were between 80 and 100 people at Tuesday’s meeting.
In his letter, Wilhelm is asking 15 members to step up for $150,000 loans, promising 10 percent interest and that he’ll waive their annual dues for a decade.
If Wilhelm defaults, those loans would be second in line behind the $12.5 million he says he owes Alpine Bank, according to the letter.
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Wilhelm is also proposing that the Cordillera Metro District buy the Club at Cordillera, as another option. That would open the four Cordillera golf courses for public play.
The metro district isn’t diving on the offer.
“We’ll do the due diligence to see if that makes sense for us. We’re in the initial stages of doing that due diligence. We’ll determine if those ideas are sound and if they make financial sense,” said Joe Wilson, director of the Cordillera Metro District. “At this point we don’t know a lot about the club operations or its financial standing. The metro district and property owners association are interested in doing what’s in the best interest of the community.”
Cordillera members at the meetings, who spoke on the condition of anonymity, said Wilhelm wants $10 million and for the Cordillera Metro District to assume his debt. That would put his price tag at $22.5 million, if his only debt is to Alpine Bank.
“We’d have to investigate the true value of the assets, and determine if it made sense for us to own those assets,” Wilson said.
That the Cordillera club was in financial trouble was a surprise to Wilson.
“I didn’t have any advance knowledge of the operations and the financial status of the club,” Wilson said. “Our understanding was that the changes they had made were moving forward, improving the facilities and the experience, and that the members were satisfied.”
Cordillera and the Cordillera Valley Club is home to 1,100 homesites. On those, 650 homes have been built.
In the letter, the Wilhelms insist they’ve improved Cordillera in many ways. But several initiatives to boost membership and revenue have failed.
Wilhelm appeared to blame Cordillera members for not sending enough member referrals his way.
He anticipated that 500 Cordillera members would participate in a new member-by-invitation referral program, attracting one new member for each of those 500 member referrals, he said in his letter.
But only 44 members participated, Wilhelm wrote.
Wilhelm also wrote that he had also hoped to generate at least 40 new members and 25 premier membership upgrades that would enable Cordillera members to play at the family’s Scottsdale, Ariz., property. Cordillera memberships costs have ranged from around $40,000 in the early days, to as much as $175,000, members said. The premier membership was another $35,000, members said.
That would have generated up to $6 million, but it brought in only $1.6 million.
The Wilhelms say this this year’s operating deficit could hit $6 million, coming on a $1.8 million shortfall in 2009.
“We are in a position where we will have to take the prudent financial steps to lessen the shortfall anticipated, and we will be doing so immediately,” Wilhelm wrote.
The Wilhelms have already started making cuts in food and beverage and golf operations. After Labor Day, “more significant changes might be necessary,” and next year will see cuts of 25 percent, around $1 million, the letter says.
Cordillera needs $2 million to get through the end of the season, Wilhelm wrote. His family is putting in $3.5 million to keep it operating. That leaves $1 million in the bank, Wilhelm wrote.
The company, Cordillera Golf Club, LLC, is run by the Wilhelm Family Trust. The trust includes David Wilhelm, his sons Patrick, Jonathan and Nicholas.
David Wilhelm could not be reached for comment Wednesday.
“The golf course is a very important part of that community,” said Ken Marchetti, who helped Gypsum’s Cotton Ranch become the town-owned Gypsum Creek golf course.
The town of Gypsum stepped in and bought the golf course, club house and all the facilities for $2.5 million. The course had been for sale a year earlier with an asking price between $7 million and $9 million.
“If the Cordillera Metro District buys it, it would become a public course,” Marchetti said. “How much access the public would have is one of the millions of details that would have to be worked out.”
Cordillera could still offer membership, although the membership privileges would likely be redefined.
“Once it’s tax supported, what would those privileges be?” Marchetti asked.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or email@example.com